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Sunday,
September 7, 2003, Chandigarh, India  
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Reddy takes over as RBI Governor
Rs 1b biotech park for Punjab
Nigeria woos investors with free land |
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Wipro plans to hire 9,000 IT staff Investor guidance
Hike in air fare hits business
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Reddy takes over as RBI Governor Mumbai, September 6 Speaking to reporters here, Reddy said he would follow the policies of his predecessor. Reddy, a former deputy of Jalan said he would continue with the reforms and soft interest rate bias. “Even reform is a continuous process. Continuity and change will be mixed appropriately depending on the context,” Reddy said. Reddy’s take over comes at a time when the country’s economy is set to accelerate following good rains. India’s economy is expected to grow at more than 6.5 per cent this year, analysts say. Prior to taking over as Governor, Reddy,62, had done a stint with the International Monetary Fund. Reddy started out as an academic in a remote village in the South India before joining the civil service in 1964. He has since held key posts in the Finance Ministry, the Central Bank and the IMF, where his latest job was as an Executive Director. Analysts say Reddy will have to ensure that the three-year soft monetary policy stays in place so that growth prospects are not threatened. The new incumbent takes over at a time when the fiscal deficit amounts to about $ 53 billion, including the debt of the states and the union government.
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Rs 1b biotech park for Punjab
New Delhi, September 6 The company has signed a memorandum of understanding with Punjab's State Council of Science and Technology to undertake the project. "Under the agreement, the Punjab Government will provide us 100 acres in Mohali for setting up the biotech park. We hope to start the project by yearend," a company spokesperson told IANS on Saturday. The cost of the project is estimated to be Rs.1 billion, the official added. Besides offering infrastructure, Beckons plans to offer technological support to companies planning operations in the biotech park. Beckons has already entered into a tie-up with Boon Vanit International of Thailand, a biotech major for sourcing technology. It is also in talks with state-owned research and development groups in the country and has entered into techno-commercial tie-up with Andhra Pradesh-based Pratishta Biotech Ltd to set up a project in Punjab for Rs.350 million. The focus of the biotech park will be healthcare, agriculture value addition and development of low- cost vaccines for various diseases. "Despite India having a strong base in microbiology, biochemistry and immunology, most of the vaccines are currently not available locally," said Gurmeet Singh, Managing Director of Beckons. According to him, a biotech park in Punjab will be advantageous given the strong agriculture base in the state and potential to absorb modern technologies, including biotechnology that offers wide applications in healthcare. The company is simultaneously exploring possibilities of setting up another biotech park in Himachal Pradesh.
— IANS
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Nigeria woos investors with free land Chandigarh, September 6 He was here along with a high-powered delegation, visiting New Delhi, Haryana, Chandigarh, Punjab and Maharashtra, before leaving for Malaysia and China. The delegation has already visited the National Dairy and Research Institute (NDRI), Karnal, and Punjab Agricultural University, Ludhiana, apart from various industrial units in the region. Other members of the delegations included Mr M.A. Anka, Minister of Agriculture, Mr A.H. Moriki, Minister of Water Resources, Mr S.G. Rikiji, Special Adviser to Governor, and Mr Satish Sharma, MD, Agro Projects West Asia Ltd. He said, “Nigeria is the sixth largest oil rich country in the world and exports 2 million barrels of crude oil every day. As part of our strategy to develop other sectors of the economy, we are offering incentives like freedom to repatriate 100 per cent of the profits to their native countries to the investors and farmers.”
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Wipro plans to hire 9,000 IT staff
Mumbai, September 6 Wipro was planning to recruit 9,000 professionals this year to meet manpower needs of its computer software services and business process outsourcing activities, its Chairman Azim Premji said here on Saturday. Talking to members of the Indian business community and visitors from ASEAN, Mr Premji said the company would recruit 6,000 engineers for software services and 3,000 for business process outsourcing operations. Currently Wipro was employing about 24,000 persons, out of which 15,000 were involved in IT services, 7,000 in IT-enabled services and call centres and 2,000 were in domestic and Asia-Pacific business, Mr Premji said., Mr Premji predicted that the Indian IT industry could grow up to $50 billion by 2007 from the present $16.5 billion.
— IANS
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Investor guidance Q: I am a salaried employee. My entitlement towards reimbursement of medical expense is Rs 15,000 per annum. I understand that income tax exemption against medical expenses is also limited to Rs 15,000 per year. This year I have incurred medical expenses of Rs 90,000 towards my mother’s hospitalisation bills. Will I be allowed (under the income tax act) to carry forward the balance expenditure of Rs 75,000 over the next five years and claim tax exemption at Rs 15,000 per year for the next five years? — Francis D’Mellow, Mumbai A: Unfortunately, the answer is in the negative. Nevertheless, it is really a good idea. Especially in the current era of high medical expenses, carry forward of extra expenses incurred during the current year for setoff against future entitlements will really be a boon. Q: I am an NRI and I have a flat at Mumbai and I may sell that and get money, please let me know if I have to pay capital gain tax or any other tax, I want to keep that in Indian Bank, I may very good interest on the huge amount, Please suggest some ways. — Ramesh Chella, Fremont, CA 94539 A: Yes, the provisions on long-term capital gains are attracted, but there are ways to save it. For saving tax on long-term capital gains, (LTCG) you can invest an amount equivalent to the LTCG in infrastructure bonds of Nabard, NHAI, NHB, REC or Sidbi within 6 months from the date of transfer to claim tax exemption u/s 54EC. You may also claim similar benefit u/s 54 by investing the LTCG to purchase a residential house within 1 year before or 2 years after the date of sale of the flat or to construct a residential house within 3 years after the date of the sale of the flat. The holding period for getting the colour of long-term asset is 1 year in the case of units of MFs and shares of listed companies. It is 3 years for other assets like housing property, jewellery, etc. Q: What is the income tax applied on interest earned in NRO Fixed Deposit accounts? Is the tax applied on all amount of interest earned or is there an upper and a lower Limit? I have earned interest of only Rs 6,000 last year and yet they have applied TDS. — Pratap Reddy A: The interest of NRO is fully taxable at the rates applicable to residents. In other words, you can claim the deduction u/s 80L up to Rs 12,000 and there is no tax below the income threshold of Rs 50,000. Income from Rs 50,000 to 60,000 attracts at 10 per cent tax. Between Rs 60,000 and Rs 1,50,000 it is at 20 per cent and at 30 per cent after that. However, TDS is applicable at 30 per cent plus surcharge and you can do nothing to avoid it. The only recourse open to you is to claim refund by filing tax returns. The surcharge applicable was 5 per cent of the income tax last year. For the current year, it is nil up to an interest income of Rs 8.5 lakhs and 10 per cent thereafter. Q: I have been an NRI for the past four years and hold a joint NRE / FCNR with my wife. Since my wife visits India more frequently, she is likely to cross the limit of 729 days in India in past seven years (by 2006 when we reach that stage of NRI for seven years). What would be our status in terms of RNOR account? Should we hold separate accounts? What is definition of an NRI - as my wife spends almost 3 - 4 months a year in India? — Sanjeev A: The income in foreign currency of RNOR is tax-free in India. If the income is yours, your status will be considered for the taxability. Your wife’s name has been added for convenience. It appears that you are the one employed abroad and the NRE/FCNR money is your income. If your wife is also earning abroad, it is preferable to open another NRE/FCNR account for her (with your name as second holder). If your wife’s stay in India is less than 182 days, she is an NRI for that year. The question of applying the test for RNOR does not arise at all.
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Hike in air fare hits business The peak season for travel to the west is in full swing. Most of the flights are full. But it is a temporary phase. More than 80 per cent of passengers are non-resident Indians (NRIs) who are returning to their work places and colleges/universities after spending vacation in this country. Passengers originating for travel to the USA, Canada and Europe from India are negligible. The sales ex-India have not actually picked up whatever claims some over-zealous travel agents and airline officials make. As the flights are full, offloading owing to over-booking causes inconvenience to passengers. Most of the offloadings, according to airport sources, are man-made problems. They are engineered by counter-assistants and counter-supervisors as they accord preference to passengers who have bought tickets in Delhi, Punjab and other stations around departing airports. This is done to promote Indian sales. In doing so, they often accommodate passengers in waiting lists, who have bought tickets in India instead of carrying passengers holding confirmed foreign tickets. According to airport officials, the pressure is mounting and soon there will be usual fist-fighting and exchange of hot words at the Indira Gandhi International Airport (IGIA), which will resemble a third-class railway platform. Dispassionate observers claim that the traffic ex-India has not picked up. Airlines and travel agents are passing through a very tough phase. The business ex-India has been further hit as first class and business class fares have been substantially hiked. According to aviation experts, such a steep increase in fares is totally uncalled for and is affecting the trade adversely. A senior travel agent said the traffic showed signs of improvement but the Mumbai twin-blasts sent us back to the square one. This adverse situation apart, two national carriers, Air-India and Indian Airlines, have yet to initiate promotional schemes, as done by Hong Kong, Singapore and Malaysia after the SARS problem. India has always been known to be slow in undertaking promotional ventures. Unfortunately, airline bosses in this country cannot function on their own until they have the backing or patronage of politicians. A senior official of the private airline has gone on record as saying that air travel will grow 15 per cent over the next seven months. This is nothing but a loud talking or needless optimism.
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Mumbai, September 6
